Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124a.jpg" align="right" border="0" height="265" width="353">
The second
estimate of 3Q U.S. economic growth was lowered from the advance report
due to slower growth in domestic demand and greater deterioration in
the foreign trade deficit. The revision to 2.4% from 3.5% was greater
than expectations for a lessening to 2.9%. Nevertheless, growth last
quarter was the first positive figure since 4Q 2007.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124b.jpg" align="right" border="0" height="265" width="353">
Accompanying
the GDP figure was the first estimate of 3Q corporate profits. The
10.6% rise versus 2Q was the third consecutive quarterly increase and
diminished the y/y decline to 6.7% from -25.1% at its worst in 4Q' 08.
Lower market interest rates lifted earnings in the financial sector by
more than one-third (25.4% y/y) and they tripled from year-end '08.
Earnings from the rest of the world increased 6.7% (-19.1% y/y) while
the end of the recession raised domestic nonfinancial profits by 2.0%
(-12.5% y/y) for the second quarterly increase.Deterioration
in the foreign trade deficit subtracted a greater 0.8 percentage points
from 3Q GDP growth after an initially estimated 0.5% subtraction.
Import growth was increased to 20.8% (-14.1% y/y) yet the gain in
exports also was revised up to 17.0% (-10.8% y/y).Domestic final demand growth also was revised down to
2.7% from 3.0%. Real PCE growth was revised down to 2.9% (-0.1% y/y)
from 3.1% as the Cash for Clunkers sales program gave slightly less
lift to vehicle sales as estimated earlier. Elsewhere, personal
consumption of furniture grew at an unrevised&nbsp; 6.3% (-5.9%
y/y) rate but the decline in spending on clothing &amp; shoes was
halved to 0.7% (-5.0% y/y). Services spending gained a slightly reduced
1.0% (0.4% y/y).On the fixed-investment side of
the GDP accounts, the quarterly rise in residential spending was
slightly reduced to 19.5% (-18.8% y/y). Business investment also fell
at a slightly increased 4.1% (-19.3% y/y) rate. Government investment
rose at an increased 3.1% rate (2.0% y/y) led by an 8.9% gain in
defense spending (5.2% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127a.jpg" align="right" border="0" height="265" width="353">
The addition to 3Q
growth in GDP from inventories was unchanged at 0.9 percentage points.
The addition followed subtractions of 1.4 and 2.4 percentage points
during the prior two quarters, and was just the second positive
contribution to GDP growth in two years.The gain
in the GDP price deflator was lowered slightly to 0.5%. The PCE price
index was ticked lower to 2.7% (-0.7% y/y) and the rise in the overall
domestic final sales price index was brought down to 1.5% (-1.0% y/y).·
The U.S. National Income &amp; Product Account data are available
in Haver's USECON and the USNA
databases. Can the Term Spread Predict Output Growth and
Recessions? A Survey of the Literature from the Federal
Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/review/09/09/part1/Wheelock.pdf">here</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained
2005$, % AR</a></th>
<th scope="col">3Q '09 Preliminary</th>
<th scope="col">3Q '09 Advance</th>
<th scope="col">2Q '09</th>
<th scope="col">1Q '09</th>
<th scope="col">2Q Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>2.4</td>
<td>3.5</td>
<td>-0.7</td>
<td>-6.4</td>
<td>-2.5</td>
<td>0.4</td>
<td>2.1</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Inventory
Effect</td>
<td>0.9</td>
<td>0.9</td>
<td>-1.4</td>
<td>-2.4</td>
<td>-1.2</td>
<td>-0.4</td>
<td>-0.4</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>1.9</td>
<td>2.6</td>
<td>0.7</td>
<td>-4.1</td>
<td>-1.6</td>
<td>0.8</td>
<td>2.5</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Foreign
Trade Effect</td>
<td>-0.8</td>
<td>-0.5</td>
<td>1.7</td>
<td>2.6</td>
<td>0.8</td>
<td>-1.2</td>
<td>0.8</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>2.7</td>
<td>3.0</td>
<td>-0.9</td>
<td>-6.4</td>
<td>-2.4</td>
<td>-0.4</td>
<td>1.7</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>0.5</td>
<td>0.8</td>
<td>-0.0</td>
<td>1.9</td>
<td>0.6</td>
<td>2.1</td>
<td>2.9</td>
<td>3.3</td>
</tr>
</tbody>
</table>
</body></html>

The second estimate of 3Q U.S. economic growth was lowered from the advance report due to slower growth in domestic demand and greater deterioration in the foreign trade deficit. The revision to 2.4% from 3.5% was greater than [...]

Q3 GDP Growth Revised Down Due To Domestic Demand & Foreign Trade

Q3 GDP Growth Revised Down Due ToDomestic Demand & Foreign Trade

Louise Curley

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background-color:#b8b8b8; Thailand Adds To The Asian Recovery
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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123j.jpg" align="right" border="0" height="265" width="353">Thailand
continues to recover from recession. On a quarter to quarter basis the
third&nbsp; quarter Real Gross Domestic Product rose 1.35% compared
with 2.27% in the second quarter, as shown in the first
chart.&nbsp; The smaller increase in the third quarter was due in
part to a much greater increase in imports than in exports and an
increase in the pace of inventory liquidation.&nbsp; While exports
increased by 46 billion baht from the second to the third quarter,
imports rose by 48 billion bahts, reducing the favorable balance on
trade in goods and service by 2 billion bahts.&nbsp; The 17 billion
baht decline in inventories in the third quarter was almost double the
9 billion baht decline in the second quarter.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123k.jpg" align="right" border="0" height="265" width="353">
The
other components of GDP showed gains:&nbsp; Private Consumption was
up 1.7%, Government Consumption, 0.9% and Gross Fixed investment,
5.8%.&nbsp; The statistical discrepancy was up almost 25%, but
because of its small size, it has little impact on the rate of
growth.An increase in imports is frequently seen as the
beginning of a recovery or expansion of activity in most economies and
particularly in emerging economies.&nbsp; They need more raw
materials and machinery than they produce domestically to meet growing
domestic and foreign demands.&nbsp; The second chart shows
Thailand's imports of Mineral Fuels and Lubricants, Chemicals and
Machinery as an illustration of this type of
import.Both sets of data are found in Haver's EMERGEPR
database.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">
THAILAND&nbsp; </th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q/Q Change</th>
<th scope="col">Q/Q %</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP (BIL BAHTS)</td>
<td>1067.5</td>
<td>1053.3</td>
<td>14.2</td>
<td>1.35</td>
</tr>
<tr>
<td class="firstcol">Private Consumption</td>
<td>562.6</td>
<td>553.0</td>
<td>9.6</td>
<td>1.74</td>
</tr>
<tr class="odd">
<td class="firstcol">Government Consumption</td>
<td>105.6</td>
<td>104.7</td>
<td>1.0</td>
<td>0.94</td>
</tr>
<tr>
<td class="firstcol">Gross Fixed Capital Formation</td>
<td>228.7</td>
<td>216.1</td>
<td>12.6</td>
<td>5.81</td>
</tr>
<tr class="odd">
<td class="firstcol">Change in Inventory</td>
<td>-17.4</td>
<td>-9.2</td>
<td>-8.2</td>
<td>-</td>
</tr>
<tr>
<td class="firstcol">Net Exports of Goods and
Services</td>
<td>180.4</td>
<td>182.7</td>
<td>-2.2</td>
<td>-</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Exports</td>
<td>691.9</td>
<td>645.9</td>
<td>46.0.</td>
<td>4.12</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Imports</td>
<td>511.5</td>
<td>463.2</td>
<td>48.2</td>
<td>-</td>
</tr>
<tr class="odd">
<td class="firstcol">Statistical Discrepancy</td>
<td>7.5</td>
<td>6.0</td>
<td>1.5</td>
<td>24.78</td>
</tr>
</tbody>
</table>
</body></html>

Thailand continues to recover from recession. On a quarter to quarter basis the third quarter Real Gross Domestic Product rose 1.35% compared with 2.27% in the second quarter, as shown in the first chart. The smaller increase in the [...]

Thailand Adds To The Asian Recovery

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123i.jpg" align="left" border="0" height="265" width="353">
The Euro Area FLASH PMIs are on the rise in November. The
flash Services reading is at its highest reading since November 2007.
The MFG index is at its highest since March 2008. It is the second
consecutive MFG reading above 50 and the third consecutive reading
above 50 for services. Readings above 50 indicate expansion. 
 
However, the percentage increase in the Yr/Yr readings for MFG and for
services each have receded for two months running as the pace of the
recovery&#8217;s improvement is slowing. 
 
Since March of 2009 the MFG index has improved by 2.4 points per month
on average. Each monthly increase has been a gain of one point or
better until this month, November 2009, when the improvement was just
0.32 points. 
 
Over this same span the services index averaged a monthly increase of
1.66 per month. However, in June of 2009 the e-Zone Services measure
did decline by 0.17 points interrupting a string of increases. Except
for that drop this month&#8217;s rise of 0.82 is the weakest since March of
2009. 
 
Both services and MFG sectors continue to increase but are doing so at
increasing slower rates. This is despite the fact that they reside only
in the mid to low 60th percentile of their respective ranges, ranges
that extend back to July of 1998 for both of them (the MFG range does
have a bit longer history, however0. 
 
Manufacturing stands at a flash reading of 50.98 compared to an average
reading of 51.09 since July of 1998. For services the current 53.17
reading compares to an average reading of 53.69. Both readings are
slowing their pace of increase while still below their respective cycle
averages. This is not good news if there is any expectation of strong
recovery in Europe. Germany may be contributing to the slow down since
its own program to stimulate car purchases has wound down. Other
nations also had a car sales promotion programs that have wound down.
So maybe some of the slowing can be explained away. But that still
leaves a question about what will speed the pace of recovery back up.
If the answer is &#8216;nothing,&#8217; then the caveat does not amount to much.
For now recovery remain is gear but it is slowing. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th scope="col" colspan="3">FLASH Readings</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="3" class="firstcol">Markit
PMIs for the Euro
Area</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Nov-09</td>
<td>50.98</td>
<td>53.17</td>
</tr>
<tr>
<td class="firstcol">Oct-09</td>
<td>50.73</td>
<td>52.58</td>
</tr>
<tr>
<td class="firstcol">Sep-09</td>
<td>49.29</td>
<td>50.86</td>
</tr>
<tr>
<td class="firstcol">Aug-09</td>
<td>48.24</td>
<td>49.92</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Segment
averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>49.42</td>
<td>52.04</td>
</tr>
<tr>
<td class="firstcol">6-Mo</td>
<td>46.30</td>
<td>49.29</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>40.50</td>
<td>45.59</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">136-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>64.7%</td>
<td>60.3%</td>
</tr>
</tbody>
</table>
</body></html>

The Euro Area FLASH PMIs are on the rise in November. The flash Services reading is at its highest reading since November 2007. The MFG index is at its highest since March 2008. It is the second consecutive MFG reading above 50 and [...]

Euro Area Flash PMIs

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123e.jpg" align="right" border="0" height="265" width="353">
Overall, the U.S. unemployment rate touched 10.2% during
October, just shy of the 10.8% postwar-record reached in December 1982.
That, however, understates the severity of joblessness. In virtually
all 50 states, since 2007 there has been a doubling of the unemployment
rate. Currently, unemployment rates range from the high of 15.1% in
Michigan to the low of 4.2% in North Dakota. The jobless rate may even
rise further as it did after the last two recessions ended when the
labor force increased faster than employment. Conversely, a
"double-dip" recession this time, as some foresee, would raise
unemployment significantly higher.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123f.jpg" align="right" border="0" height="265" width="353">

Michigan tops the list of states with the highest unemployment
rate. (See table.) With its large exposure to the auto industry,
Michigan saw its unemployment rate more-than-double to 15.1%. Since
early last year, the number of unemployed in Michigan also has doubled
to 733,000.Last month's cash-for-clunkers vehicle sales incentive
program briefly stemmed the increase, but only a sustained rise in
sales will encourage vehicle manufacturers to increase hiring.
Amongst other large states, California has suffered the
enormously. The downturn in the high-tech sector and red-ink in the
state's budget has caused the unemployment rate also to
more-than-double to 12.5% from its low, but that understates the
severity of the situation. With its larger population, the rate
increase represents a 1.4 million gain in the number of unemployed.In
Florida, the severity of the unemployment rate's near-tripling to 11.2%
is due to a depressed tourism industry and reduced construction
activity. The number of unemployed rose by three-quarters of a million
persons. In Ohio, employment also relies heavily on the auto industry
though some stabilization is provided by the food-processing industry
and Wal-Mart's headquarters. Thus, the near-doubling of its
unemployment rate to 10.5% from last year reflects lower motor vehicle
production and an increase of roughly 300,000 in the number unemployed.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123g.jpg" align="right" border="0" height="265" width="353">

Perhaps a more diverse pool of industries has helped those
states with unemployment rates lower than the national average. In
Texas, with 12.1 million in the labor force, the strength in oil prices
and the stability of the food industry have held the unemployment rate
below the national average. Nevertheless, the number of unemployed has
risen by one-half million since its 2007 low and the jobless rate has
nearly doubled to 8.3%. In Massachusetts, with the workforce heavily
exposed to the education &amp; government sectors, the unemployment
rate also has held below the national average at 8.9%. Virginia also
has its disproportionate exposure to the government sector to help
explain a relatively low unemployment rate of 6.6% last month.
Nevertheless, the number of unemployed has doubled by 160,000.
Agriculture is the mainstay of North Dakota's economy which
has enabled its unemployment rate to remain the lowest in the country.
Nevertheless, at 4.2% the rate is up from the 3.0% low as the number of
unemployed rose by one-quarter to 15,100 from last year. In Nebraska,
unemployment also remained low due to a large agriculture sector as
well as large education &amp; health sectors.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123h.jpg" align="right" border="0" height="265" width="353">

Currently, the National Association of Business Economists
forecasts 3.0% growth in the economy for 2010. That would result in
little, if any, reduction in the unemployment rate since 3.0% barely
exceeds the economy's growth potential. Some near-term boost to GDP
growth could always occur due to a rebound in inventories, which have
been depressed, or from heightened government spending, a sure bet.
However, the more potent source for a quicker recovery would be
consumer spending, but two factors suggest that a sustained boost is
unlikely. For one, too much debt accumulation caused the savings rate
to crater from 1980 through 2008. It only recently has edged higher.
Secondly, the aging of the big-spending, baby-boom generation as a
percent of the total has been underway for more than ten years and will
continue. That means less force behind purchases of homes and consumer
durables. Thus, relatively high unemployment rates seem likely for the
foreseeable future.
The data used in this report can be found in Haver's EMPLR
and USECON databases.
The long and large decline in state employment growth
volatility from the Federal Reserve Bank
of Philadelphia can be found <a href="http://www.phil.frb.org/research-and-data/publications/working-papers/2009/wp09-9.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
(%)</a>&nbsp;</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Oct. '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="8" class="firstcol">&nbsp; Selected Highest
States</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Michigan</td>
<td>15.1</td>
<td>15.3</td>
<td>15.2</td>
<td>9.1</td>
<td>8.4</td>
<td>7.1</td>
<td>6.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Nevada</td>
<td>13.0</td>
<td>13.3</td>
<td>13.2</td>
<td>7.7</td>
<td>6.7</td>
<td>4.7</td>
<td>4.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;California</td>
<td>12.5</td>
<td>12.3</td>
<td>12.3</td>
<td>8.0</td>
<td>7.2</td>
<td>5.4</td>
<td>4.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;South
Carolina</td>
<td>12.1</td>
<td>11.7</td>
<td>11.4</td>
<td>7.8</td>
<td>6.9</td>
<td>5.6</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Florida</td>
<td>11.2</td>
<td>11.1</td>
<td>10.8</td>
<td>6.9</td>
<td>6.2</td>
<td>4.1</td>
<td>3.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Ohio</td>
<td>10.5</td>
<td>10.1</td>
<td>10.8</td>
<td>6.9</td>
<td>6.5</td>
<td>5.6</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">U.S. Average</td>
<td>10.2</td>
<td>9.8</td>
<td>9.7</td>
<td>6.6</td>
<td>5.8</td>
<td>4.6</td>
<td>4.6</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">&nbsp;Selected Lowest
States</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Indiana</td>
<td>9.8</td>
<td>9.7</td>
<td>9.9</td>
<td>6.4</td>
<td>5.9</td>
<td>4.6</td>
<td>5.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Massachusetts</td>
<td>8.9</td>
<td>9.3</td>
<td>9.1</td>
<td>5.8</td>
<td>5.3</td>
<td>4.5</td>
<td>4.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Texas&nbsp;</td>
<td>8.3</td>
<td>8.2</td>
<td>8.0</td>
<td>5.3</td>
<td>4.9</td>
<td>4.4</td>
<td>5.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Maryland</td>
<td>7.3</td>
<td>7.2</td>
<td>7.1</td>
<td>4.8</td>
<td>4.4</td>
<td>3.5</td>
<td>3.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Virginia</td>
<td>6.6</td>
<td>6.6</td>
<td>6.6</td>
<td>4.3</td>
<td>4.0</td>
<td>3.0</td>
<td>3.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Nebraska</td>
<td>4.9</td>
<td>4.9</td>
<td>5.0</td>
<td>3.6</td>
<td>3.3</td>
<td>3.0</td>
<td>3.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;North
Dakota</td>
<td>4.2</td>
<td>4.1</td>
<td>4.3</td>
<td>3.2</td>
<td>3.1</td>
<td>3.1</td>
<td>3.2</td>
</tr>
</tbody>
</table>
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Overall, the U.S. unemployment rate touched 10.2% during October, just shy of the 10.8% postwar-record reached in December 1982. That, however, understates the severity of joblessness. In virtually all 50 states, since 2007 there has [...]

Although Stresses Vary, All States Endure Doubling Of Unemployment

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123c.jpg" align="right" border="0" height="265" width="353">
The upward momentum in the U.S. economy sagged during the last
few months. That's the message from lower readings of the Chicago Fed
National Activity Index (CFNAI) from the Federal Reserve Bank of
Chicago. The index slipped again m/m after having improved sharply from
the January low. The October reading of -1.08 was off slightly from
-1.01 during September. Nevertheless, both figures are greatly improved
from the series' low of -4.13 reached this past January. Since 1970
there has been a 74% correlation between the level of the index and the
q/q change in real GDP but during the last ten years that correlation
has risen to 80%.
The three-month moving average which smoothes out
some of the volatility of the index also slipped m/m but remained near
its highest level since February of 2008.
An index level at or below -0.70 typically has indicated
negative U.S. economic growth. A zero value of the CFNAI indicates that
the economy is expanding at its historical trend rate of growth of
roughly 3%. The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_november2009.pdf">here</a>.
The Chicago Fed indicated in its data release that the level
of the CFNAI "indicates low inflationary pressure from economic
activity over the coming year."<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123d.jpg" align="right" border="0" height="265" width="353">

The Chicago Fed indicated that 32 of the series' individual
indicators made positive contributions to the October index while 53
made negative contributions. The CFNAI is a weighted average of 85
indicators of economic activity. The indicators reflect activity in the
following categories: production &amp; income, the labor market,
personal consumption &amp; housing, manufacturing &amp; trade
sales, and inventories &amp; orders.
In a separate survey, the Chicago Fed indicated that its
Midwest manufacturing index improved during September after an upwardly
revised August reading. As a result, a discernable uptrend in the index
now is evident versus the June low. Indicators for the auto, steel, and
resource sectors improved while the reading for the machinery sector
hit a new low. The Chicago Federal Reserve figures are available in
Haver's SURVEYS database.
Rescuing asset-backed securities markets from
the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cfljanuary2010_270.pdf">
here</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Fed</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">October '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">CFNAI</td>
<td>-1.08</td>
<td>-1.01</td>
<td>-0.63</td>
<td>-1.48</td>
<td>-1.77</td>
<td>-0.35</td>
<td>0.05</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Moving
Average</td>
<td>-0.91</td>
<td>-0.67</td>
<td>-0.94</td>
<td>-2.31</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Personal Consumption &amp; Housing&nbsp;</td>
<td>-0.52</td>
<td>-0.61</td>
<td>-0.38</td>
<td>-0.46</td>
<td>-0.33</td>
<td>-0.10</td>
<td>0.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment Unemployment &amp; Hours</td>
<td>-0.46</td>
<td>-0.60</td>
<td>-0.53</td>
<td>-0.77</td>
<td>-0.62</td>
<td>-0.15</td>
<td>0.01</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production &amp; Income</td>
<td>-0.07</td>
<td>0.23</td>
<td>0.53</td>
<td>0.07</td>
<td>-0.55</td>
<td>-0.05</td>
<td>-0.01</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Sales, Inventories &amp; Orders</td>
<td>-0.02</td>
<td>-0.04</td>
<td>-0.25</td>
<td>-0.31</td>
<td>-0.24</td>
<td>-0.06</td>
<td>-0.01</td>
</tr>
</tbody>
</table>

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The upward momentum in the U.S. economy sagged during the last few months. That's the message from lower readings of the Chicago Fed National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago. The index slipped again m/m [...]

Chicago Fed Index Eases Again Pointing Towards Softer GDP Growth

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 <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123a.jpg" align="right" border="0" height="265" width="353">
Improved affordability is a great help when buying a home. The
National Association of Realtors reported that October sales of
existing homes rose sharply to the highest level since July
2007. The 10.1% m/m increase to 6.100M units (SAAR) followed an 8.8%
rise during September and it raised sales to the highest level since
February 2007. Moreover, sales were up by more than one-third from the
January low. The gain in October home sales outpaced Consensus
expectations for a rise to 5.70M. Total sales include sales of condos
and co-ops.
Sales of existing single-family homes alone increased a sharp
9.7% to 5.330M (21.4% y/y) last month and were up 20.7% from the
January low. (These data have a longer history than the total sales
series). Sales of condos and co-ops rose 13.2% and were up by nearly
one-half from last October.
Sales have been helped by a recently extended tax credit for
first-time home buyers. The credit of up to $8,000 runs though early
next year. The full details of the home-buyer tax credit can be found <a href="http://www.federalhousingtaxcredit.com/2009/faq.php">here</a>.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091123b.jpg" align="right" border="0" height="265" width="353">

The median price of all existing homes fell for the fourth
straight month, to $173,100. Though prices were still lower than the
year-ago level, they have risen 5.0% from the January low. The median
price for a single-family home alone fell to $173,100 (-6.8% y/y).
These price declines have sharply raised home affordability. During
September the composite index of home affordability rose again and was
up 18.2% from the year ago level.
The number of unsold homes (condos &amp; single-family)
for sale fell 3.7% (-14.9% y/y) during October fell to the lowest level
since January 2007. At the current sales rate there was a 7.0 months'
supply of homes on the market which was nearly the lowest since
early-2007. The latest figure was down from a high of 11.3 months early
last year. For single-family homes, the inventory fell 3.2% m/m (-14.3%
y/y). At the current sales rate there was a 6.8 month's supply of
single-family homes on the market, the lowest since early-2007.
The data on existing home sales, prices and affordability can
be found in Haver's USECON database. The regional
price, affordability and inventory data is available in the REALTOR
database.
Preventing a Repeat of the Money Market Meltdown of
the Early-1930s from the Federal Reserve Bank of Dallas can
be found <a href="http://dallasfed.org/research/papers/2009/wp0904.pdf">here</a><a href="http://dallasfed.org/research/papers/2009/wp0904.pdf">.
</a><table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Existing
Home Sales (Thous, SAAR)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Oct. Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>6,100</td>
<td>5,540</td>
<td>5,090</td>
<td>23.5%</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>1,060</td>
<td>950</td>
<td>910</td>
<td>27.7</td>
<td>845</td>
<td>1,010</td>
<td>1,093</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,430</td>
<td>1,250</td>
<td>1,140</td>
<td>28.8</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>2,300</td>
<td>2,040</td>
<td>1,890</td>
<td>25.7</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,310</td>
<td>1,290</td>
<td>1,150</td>
<td>12.0</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>5,330</td>
<td>4,860</td>
<td>4,470</td>
<td>21.4</td>
<td>4,341</td>
<td>4,960</td>
<td>5,712</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>173,100</td>
<td>176,000</td>
<td>177,300</td>
<td>-7.1</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042</td>
</tr>
</tbody>
</table>
</body></html>

Improved affordability is a great help when buying a home. The National Association of Realtors reported that October sales of existing homes rose sharply to the highest level since July 2007. The 10.1% m/m increase to 6.100M units [...]

U.S. Existing Home Sales Surge To Highest Since 2007 As Prices Fall Again

U.S. Existing Home Sales Surge ToHighest Since 2007 As Prices Fall Again

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

Charts of the Week: Tariff Truce, Tenuous Trust

250430N1.jpg

250430O1.jpg

Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

250430P1.jpg

250430Q1.jpg

Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

250430R1.jpg

250430S1.jpg

- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

250430A.jpg

250430B.jpg

High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

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- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

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The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

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The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

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- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Economy in Brief: November 2009

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